Central planning in the context of "Planned economy"

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👉 Central planning in the context of Planned economy

A planned economy is a type of economic system where investment, production and the allocation of capital goods takes place according to economy-wide economic plans and production plans. A planned economy may use centralized, decentralized, participatory or Soviet-type forms of economic planning. The level of centralization or decentralization in decision-making and participation depends on the specific type of planning mechanism employed.

Socialist states based on the Soviet model have used central planning, although a minority such as the former Socialist Federal Republic of Yugoslavia have adopted some degree of market socialism. Market abolitionist socialism replaces factor markets with direct calculation as the means to coordinate the activities of the various socially owned economic enterprises that make up the economy. More recent approaches to socialist planning and allocation have come from some economists and computer scientists proposing planning mechanisms based on advances in computer science and information technology.

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Central planning in the context of East Germany

East Germany, officially the German Democratic Republic (GDR), was a country in Central Europe from its formation on 7 October 1949 until its reunification with West Germany (Federal Republic of Germany) on 3 October 1990. Until 1989, it was generally viewed as a communist state and described itself as a socialist workers' and peasants' state. The economy of the country was centrally planned and state-owned. Although the GDR had to pay substantial war reparations to the Soviet Union, its economy became the most successful in the Eastern Bloc.

Before its establishment, the country's territory was administered and occupied by Soviet forces following the Berlin Declaration abolishing German sovereignty in World War II. The Potsdam Agreement established the Soviet-occupied zone, bounded on the east by the Oder–Neiße line. The GDR was dominated by the Socialist Unity Party of Germany (SED), a communist party, before being democratized and liberalized amid the revolutions of 1989; this paved the way for East Germany's reunification with West Germany. Unlike the government of West Germany, the SED did not see its state as the successor to the German Reich (1871–1945). In 1974, it abolished the goal of unification in the constitution. The SED-ruled GDR was often described as a Soviet satellite state; historians describe it as an authoritarian regime.

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Central planning in the context of Economy of North Korea

The economy of North Korea is a centrally planned economy, following Juche, where the role of market allocation schemes is limited, although increased to an extent. As of 2024, North Korea continues its basic adherence to a centralized planned economy. With a total gross domestic product of $28.500 billion as of 2016, there has been some economic liberalization, particularly after Kim Jong Un assumed the leadership in 2012, but reports conflict over particular legislation and enactment. Since the 1990s, informal market activity has increased, which the government has tolerated. These markets are referred to as 'Jangmadang', and were formed as a result of the economic collapse during the 1990s, which made the government unable to distribute food to its people.

After the start of the COVID-19 pandemic, the government tightened border control and began major crackdowns on private economic activities with a shift to a state-run monopoly on food sales, followed by greater centralization of foreign trade, and overall control over the economy.

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